At its second meeting for the year, the Reserve Bank determined that official interest rates will remain at the record low 1.5 per cent over March. Rates have been on hold since last August’s cut.
Latest economic data produced some positives, with strong growth returning to the economy over the December quarter.
The short-term outlook for rates remains steady despite most housing markets strengthening. More increases in mortgage rates from banks, however, are likely reflecting finance market and regulatory pressure.
Despite the recent, mostly trade-related rebound in the economy, other drivers remain mixed including a strengthening dollar, flat retail sales, declining home building activity, low inflation and underemployment. The Reserve Bank will be alert to improvements in these factors in determining monetary policy settings.
The bank will also be alert to generally strengthening housing markets, with Melbourne and Sydney reporting the best lead-in on record to the autumn selling season. However, signs continue to emerge that despite strong conditions, underlying house price growth is moderating.